Will Consumers Pay More for Sustainably Certified Wine?

Completing the process of becoming certified for producing wine using sustainable practices can take years for vineyard owners. Achieving organic or biodynamic certification can take even longer. Plus the cost of becoming certified and going through the inspection process can cost thousands of dollars. Is this worth it for grape farmers? Do consumers really care, and are they willing to pay more for an eco-certified wine?

Wine Consumers. Photo Credit: Fotolia_123622764

A 2017 survey conducted at Sonoma State University Wine Business Institute with 301 wine consumers illustrates a willingness to pay several dollars more per bottle for “green” certified wines. The online survey was completed by a convenience sample of 26% men and 74% women living in the USA. Age by generation included 65% Millennial, 9% Gen X, and 26% Baby Boomers.

Definitions for Eco-Certified Wines

Consumers were asked: “Of the three major methods of environmental certification for wine in the US, which appeals to you most?” The results show that 44% selected sustainable wine, followed by 36% biodynamic and 20% organic grape wine.

Definition

Which Appeals to You Most?

Certified Sustainable Wine – made in a way that is environmentally friendly, equitable to employees and economically viable to winegrowers. No agri-chemicals are applied, unless necessary to save the crop.

44%

Made with Certified Organic Grapes – means the grapes were farmed with NO agri-chemicals. To achieve this certification, the vineyard must prove they have only used organic products for 3 years or more.

20%

Certified Biodynamic Wine – goes beyond Organic by not only requiring ORGANIC grapes, but also uses farming practices designed to return the soil to a natural state.

36%

Will You Pay More for Eco-Certified Wine?

Respondents were then asked if they would pay more for a bottle of eco-certified wine. Figure 1 illustrates that 91% of the sample would pay $1 more for a bottle of wine made from sustainably certified grapes, 88% would pay $1 more for a bottle made from certified organic grapes, and 85% would pay $1 more per bottle of wine made from certified biodynamic grapes. Likewise, a range of 78% – 81% of consumers said they would be willing to pay $2 more per bottle. However, as the price increased from $3 more to $4 more to $5 more per bottle, there were a decreasing number of consumers willing to pay more. Interestingly, however, as the price increased a slightly larger percentage of consumers were willing to pay more for certified biodynamic wines.

Figure 1: Are You Willing to Pay More Money for a Bottle of Eco-Certified Wine?

Implications for Winegrape Growers

The results of this survey indicate that consumers are interested and willing to pay a slight premium for wines that are certified sustainable, organic, and biodynamic. The concept of sustainability seems to have slightly more appeal than the other two certifications, even when clear definitions are provided. It is possible this may be due to the fact that the definition of sustainability includes equitable work practices for employees, as well as positive environmental actions. Organic and biodynamic definitions primarily focus on environmental practices.

Previous surveys focusing on this topic show that many consumers are confused by the multiple types of certifications, and that clear messaging must be included in order for the consumer to understand the benefits of the certification. Other surveys have also shown that many wine consumers already consider wine to be a natural product and are surprised to learn that there are certifications to insure organic and/or environmental practices. Due to this type of confusion, some wineries do not advertise the fact that they are certified or are using sustainable, organic and/or biodynamic practices. However, the results of this survey indicate that the timing may be more appropriate now to consider clearer communication on these positive farming practices.

It’s the Right Thing to Do

It should be noted, however, that there are many vineyard and winery owners around the world who elect to implement sustainable, organic, or biodynamic practices because they believe it is the right thing to do. They mention the long-term benefits for the planet, their families, and their local communities. For more information on this topic, see study published in Wine Spectator entitled: Is Being Sustainable Worth It for Wineries.

Very interesting data, especially that Certified Sustainable came out ahead of the other certifications. It’s also thought-provoking to consider that the equitable treatment of employees is a factor. In the end though, your point that consumers lack clarity on the various categories is well taken and may be key to commercializing the concepts.

Excellent insights. So much more research to do here. How relevant is the buyers intent to purchase based on Nielsen data. Does Organic ie Frey, Sustainable ie Benziger and so forth bear out this intent vis a vis other comparable brands

Sorry, but nope. As someone who was once a wine buyer for a retail chain, I can verify through actual customer sales data and customer input that putting “organic” on a wine label immediately decreases the value of the wine.

I had sections for the different varietals and regions, including a selection of local wine (Sonoma Valley) and had a section dedicated to organic wines (including bio-dynamic, sulfite-free, etc) and every other section of some 400+ labels sold across every price-point up to $100 a bottle. I couldn’t sell a bottle in the “organic” section for more than $12, no matter how much hand-selling I tried.

People who are willing to spend $15 on frozen organic doggie biscuits at a Whole Foods absolutely will NOT touch a wine for more than $15 a bottle.

After that job, I then went into the field as a wine sales rep across the San Francisco Bay Area (an area where “organic” is a very important cultural factor) and ALL wine buyers I ran into for retail locations and restaurants all said the same thing… people who willingly pay more for organic product in every other segment in their lives refuse to touch wines that are $20 or above.

Now with that said, maybe they’re willing to spend “a dollar more” if that means going from $6 to $7, but that’s about it.

I represented a LOT of wineries that used organic practices that intentionally left that information off of their labels because of this issue. Would be an interested secondary study to actually go to wineries and see if they are experiencing a change in customer expectations that might result in them rethinking their approach to how they advertise their growing practices.

Brian, Yes I agree. There was a study several years ago at UCLA showing that wineries that listed eco-certifications on their labels were often cheaper than those that did not, but received higher ratings and tasted better. http://newsroom.ucla.edu/releases/do-eco-friendly-wines-taste-better. Let’s hope that wineries are more willing in the future to include the information on the label.

Brian, Yes I heard the same thing from wineries. They don’t want to put it on the label, even though they are certified. There was a study several years ago at UCLA showing that wineries that listed eco-certifications on their labels were often cheaper than those that did not, but received higher ratings and tasted better. http://newsroom.ucla.edu/releases/do-eco-friendly-wines-taste-better. Let’s hope that wineries are more willing in the future to include the information on the label.

In classes of trade there is a big gap in value that these categories brings. In meeting a restaurant’s philosophy in sourcing produce and animal products that are naturally grown and harvested, so to match that care from the back of the house, On-Premise places a very high value on Organic and Bio-Dynamic and often indicate that most if not all selections on their restaurants’ lists qualify as such.

Dear Lars, This is a very good point. Restaurants, and some other on-premise establishments, are much more interested and have the time to tell the story of eco-label wines, whereas this may not be the case in a fast-paced grocery store or other off-premise establishments.

Thank you for your opinion Sara. As as wine consumer, we value you feedback. I should mention that there are some misconceptions about organic farming, and that many organic producers DO farm in a sustainable fashion by ensuring social equity for workers. Also many do reduce carbon footprint.